In Our View, The Question v. M/S Kothariimpex Udaipur, Wherein Considering The Various Judgments Ofdifferent High Courts, And Other Provisions Of The Act, Ithas Been Held, That The Requirem

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- INCOME TAX APPEAL No. 47 of 2006 M/S JYOTIJAIN Mr. KK BISSA, for the appellant Mr. ARUN BHANSALI, for the respondent Date of Order : 20.8.2008 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. Heard learned counsel for the parties. This appeal has been filed by the Revenue against thejudgment of Tribunal dt. 29.4.2005. Learned Tribunal haddismissed the appeal of the Revenue, and affirmed the orderof Commissioner Appeals. Learned Commissioner allowed theappeal of the assessee, and held, that since the assesseehas produced the certificate obtained from DistrictIndustries Centre, wherein a sum of Rs.4,83,449/- wascertified to have been converted into loan, thedisallowance made under section 43B was set aside, and theAO was directed to allow the claim, after verification ofthe certificate. Then disallowance under section 80IA wasalso set aside, while holding, that the appellant had filed her return of income on 21.10.1998, along with the auditreport as required by section 44AB, and during the courseof assessment proceedings, claim for deduction was alsomade under section 80IA, vide letter dt. 13.11.2000,contending that all the necessary conditions for claimingdeduction are fulfilled, and also filed the report in formNo.10CCD, as prescribed under sub-section(7) of section80IA. This was disallowed by the Assessing Officer, on theground, the appellant was required to file the report inform No.10CCD “along with the return”. It was contendedbefore the Commissioner, that the assessee did not claimany deduction under section 80IA in the return filed undersection 139(1). However, after filing of the return, itcame to her notice, that the return did not take intoaccount claim of the deduction under section 80IA, inrespect of unit M/s Avani Minerals Industries. Accordingly,the account was got audited, and a report, as required bysub-section (7) of section 80IA was obtained, and the claimfor deduction was made, during the course of assessmentproceedings. Learned Commissioner relying upon thejudgment, reported in (1987) 23 ITD 364, Hem SonsIndustries Ltd., found the requirement of filing the reportalong with the return was directory, and held, that theclaim of deduction is allowable. The Tribunal held, that the requirement of filingreport along with return of income is directory, and not mandatory, and if the said report is made available to theAssessing Officer during the course of assessmentproceedings, the lawful deduction to the assessee shouldnot be rejected. The appeal was admitted on 18.4.2006, by framing thefollowing substantial questions of law :- “1. Whether on the facts and in thecircumstances of the case the Tribunalwas justified in holding that forclaiming deduction under section 80-IAthe CIT was justified in holding claimof the assessee though claim was madeafter filing the account and auditreport and claimed during the course ofassessment? 2. Whether on the facts and in thecircumstances of the case the Tribunalwas justified in holding that theAssessee was entitled to deductionunder Section 43-B of the Act inrespect of Sales tax amount deferredunder the State Government's DefermentScheme and without actual payment ofTax under Section 43-E of the Act?” In our view, the question No.1 is covered by adecision of Division Bench of this Court dt. 15.2.2008, inIncome Tax Appeal No.20/2005, CIT Udaipur vs. M/s KothariImpex Udaipur, wherein considering the various judgments ofdifferent High Courts, and other provisions of the Act, ithas been held, that the requirement cannot be said to beonly directory. Of course, the learned counsel for the 2. Whether on the facts and in thecircumstances of the case the Tribunalwas justified in holding that theAssessee was entitled to deductionunder Section 43-B of the Act inrespect of Sales tax amount deferredunder the State Government's DefermentScheme and without actual payment ofTax under Section 43-E of the Act?” In our view, the question No.1 is covered by adecision of Division Bench of this Court dt. 15.2.2008, inIncome Tax Appeal No.20/2005, CIT Udaipur vs. M/s KothariImpex Udaipur, wherein considering the various judgments ofdifferent High Courts, and other provisions of the Act, ithas been held, that the requirement cannot be said to beonly directory. Of course, the learned counsel for the assessee tried to distinguish the judgment by contendingthat in that case the report was filed after completion ofassessment, while in the case in hand it had been filedduring the assessment proceedings. In our view, this doesnot make any difference. Whether the report is filed duringassessment proceedings or after assessment, if therequirement of filing “along with the return” is mandatory,the allowance of deduction cannot be made. On the otherhand, if the requirement is directory, the permissibilityof filing cannot be confined to the stage of “during theassessment proceedings”. Thus, the distinction sought to bedrawn cannot be accepted. In that view of the matter, forthe reasons as given in CIT Udaipur vs. M/s Kothari ImpexUdaipur, the question No.1 is answered in favour of theRevenue, and against the assessee. So far as question No.2 is concerned, it is alsocovered, but against the Revenue, and in favour of theassessee, by judgment of this Court dt. 13.5.2008, in bunchof appeals, led by Income Tax Appeal No.30/2005, CITUdaipur vs. M/s Ravindra Platimum Pvt. Ltd. For the reasonsas given in the judgment in M/s Ravindra Platimum's case,the question No.2 is answered against the Revenue and infavour of the assessee. Result of the aforesaid discussion, the appeal ispartly allowed, the order of the C.I.T., and Tribunal allowing deduction under Section 80IA is set aside, and itis held, that the assessee was rightly disallowed thededuction under section 80-IA by the assessing officer, andhas rightly been allowed deduction under section 43-B bythe Tribunal. The Assessing Officer to do the remainingneedful. The parties shall bear their own costs of thisappeal. ( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J. m.asif/